Alaska Legislature approves public opt-in retirement plans for businesses statewide

The state of Alaska may soon offer managed retirement accounts to businesses in the state that don’t already offer a retirement plan. 

By a 31-9 vote on Monday, the Alaska House of Representatives approved Senate Bill 21, the “Alaska Work and Save” program sponsored by Sen. Bill Wielechowski, D-Anchorage. 

The Senate, which approved a prior version of the bill in April, gave its final approval to the House-passed version by a 17-3 vote on Tuesday.

If enacted by Gov. Mike Dunleavy, SB 21 would require the Alaska Department of Revenue to create and administer an automatic individual retirement account program with open enrollment.

Under the program, eligible workers would have 5% of their paychecks automatically deducted and deposited into an investment account.

“Currently, 64% of businesses do not offer a retirement option for their employees, and this is a great way to retain and recruit workers,” said Rep. Mia Costello, R-Anchorage, who sponsored the bill in the House.

Costello said the ultimate goal is for Alaska to join a partnership with one or more other states that offer similar programs like Colorado’s SecureSavings program. Sixteen other states already have those programs, she said.

Alaska’s program would allow participants to also shift some of their Permanent Fund dividend into a retirement savings account. 

The Department of Revenue estimated that the state would need to spend about $660,000 to set up the program in its first year and approximately $360,000 annually, which the state would pay for with fees collected from participants statewide.